Anand's Thoughts on Intel's TV Initiativeby Anand Lal Shimpi on February 14, 2013 4:21 PM EST
Earlier this week Intel announced what we'd heard rumors of in months past, that it would be creating an IPTV service along with a custom software and hardware platform to deliver it direct to consumers. A few hours after the announcement, I had the opportunity to speak with Erik Huggers, formerly of the BBC and currently heading up Intel's new Media division.
For years Intel has tried to grab a slice of the TV business. Remember the Intel CE series of Atom based SoCs? How about Sandy Bridge's Intel Insider technology? Both of these were focused attempts to solve problems within the TV industry, but both ultimately went no where. Intel's solutions thus far have been too narrow in scope to do anything.
The TV today reminds me a lot of smartphones in the early 2000s. There's tons of potential, but largely ruined by slow hardware, kludgy user interfaces and heavy fragmentation both on the content side and on the cross platform compatibility side. Much like the smartphone, the solution to revolutionizing the TV as a platform is unlikely to come from within the existing market. And just like the smartphone revolution, a disruptive solution here may very well come from a computing company.
What Is It?
At a high level Intel's unnamed TV play seems to work like this. Intel negotiates deals with content providers, said content lives on a server farm somewhere (likely running tons of Xeons courtesy of mother Intel). Using a box that Intel will sell you, you'll get access to this content over the Internet. The box will run an OS and software layer both developed by Intel. The content will include live TV, traditionally only available via a cable TV subscription. The box Intel will sell you won't act as a traditional PVR/DVR, instead you'll be able to activate a catch-up feature to pull down older episodes after they air, as well as live TV. How far back you'll be able to catch up will depend on the content license, it's technically feasible to go back as far as you'd like - but not all content owners will allow it. Intel's service will also include video on demand features to fill this gap. The goal is to provide one platform where you can get access to everything: live TV, episodes/content that have already aired, and even older content through VoD.
The content will be bundled together in some form. This isn't a purely á la carte TV service, but rather bundles put together by Intel Media rather than your cable company. Think cable channel/network bundling, but perhaps more granular than you're used to. Simply offering the same bundles at the same price as your cable company won't work, so I suspect the bundles will have to be more user friendly (more sensible, smaller, etc…).
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Intel doesn't seem to have any intentions of keeping the content exclusive to this one box either. Erik wants to see this content on Ultrabooks, smartphones and tablets as well as on your TV. It sounds a lot like the holy grail of digital convergence: any content, on any device, anywhere. Netflix was really one of the first to achieve this level of ubiquity, but only really for older content. Intel seems to want to do this with live TV.
Intel isn't talking about bitrates or codecs yet, nor is it disclosing what content providers have already signed up for the service. The platform will launch this year and it'll be immediately apparent whether or not Intel is on the right track after that happens.
Pricing is also unknown at this point. Erik was careful not to brand Intel's TV service as a value play, implying that you may not actually save any money vs. your current cable provider. It's pretty obvious from the start though that Intel can't just offer a better experience than your cable TV provider, it also has to offer a cost competitive platform as well.
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justmy02 - Friday, February 15, 2013 - linkAnand,
I'm glad you raised this issue. Like you and many others who have commented here, I dropped my cable subscription years ago, with no regrets. I tried Netflix for a while, and it's reasonably priced for what it offers, but the wait for content is far too long. Amazon Prime is also a good deal, but has limited selection. As you are obviously aware, nearly every content channel suffers from such limitations. I know it's a faux pas to discuss it openly here, but there's one channel with none of these problems: Usenet.
While it's perhaps unfair to make the comparison, it's a realistic one. At the end of the day, paying a cable provider, Hulu, or any of the others for new programming is irrational under current market conditions. There are a few exceptions, such as live sporting events, but many of those are broadcast for free. While one can make a case for Netflix as a means of easily accessing older material, it's no contest for anything recent. I'm sure the content industry would prefer it to be otherwise, but this is the situation in the real world. For an official content channel to win the real value comparison, it will have to offer something similar to the Netflix model, only without restrictions on time of release. When I can get all the music, movies, and television shows ever made for a flat monthly fee, I'll gladly pay it (within reason; it would have to be well below $100/month). Until then, these companies are living in a world of fantasy.
Intel might be able to get a foothold in the current ecosystem, but I'm skeptical. After all, even Apple has failed at negotiating satisfactory deals with content owners. I applaud Intel for moving forward with this; they may develop some useful infrastructure improvements that facilitate the solution to come. That said, the cable companies and the studios will not allow meaningful innovation until large populations are fed up with the dominant business model. Cord-cutters may be common on these forums, but they remain rare overall.
If I have a simple message for Intel, it is the following: Treat this division as a research investment, not to be held to the profitability standard of other units. When the existing market structure collapses, they might be in position to fill the void. Until then, greed, lawyers, and contracts are in the way, and even mighty Intel can't change that.
RandomUsername3245 - Friday, February 15, 2013 - linkMy big problem with Usenet is that it is illegal, and the Usenet services can easily tie your IP address to the content you download. TV shows are just not worth the risk of a lawsuit or criminal conviction. (I also think TV shows are generally not worth their price as I cut the cable 5 years ago and am not going back.)
RandomUsername3245 - Friday, February 15, 2013 - linkI'll be shocked if Intel can do more than the current players: unlimited streaming of old content for a fixed monthly fee (Netflix), pay-per-view new content (Vudu, Netflix, Xbox, etc), and a few limited episodes from the current season (Hulu Plus). They will not have ESPN networks, and they will probably not have the premium channels. The cable industry is an entrenched monopoly / oligopoly. They have *no* motivation to allow a new competitor access to their media content.
Also, you guys desperately need to tie these discussion threads into the anandtech forums. It's next to useless actually trying to keep up with a discussion in these under-article comments. I think Arstechnica does this, though I bet it would be a bit change to the website / forums codebase!!
Jumangi - Friday, February 15, 2013 - linkThe pie in the sky dreams continue. Apple has been trying to pry open this content door for years with no success along with others and no success. Unless Intel is willing to throw massive amounts at the content providers they are not going to break with the cable and satellite companies.
I truly believe what Netflix is doing by starting to make their own content is how this will ultimately happen, not current cable shows on 'Internet TV' packages. The old Hollywood guard just can't bring themselves to change.
will2 - Friday, February 15, 2013 - linkWhat I and a few friends want is not a tradional TV, but a small multipurpose mediastreamer box (running perhaps Android or Ubuntu) that can accept input from a TV-Tuner stick, media selected from a USB drive, SD slot, WiFi, Ethernet, and deliver the stream to a big screen Monitor and/or sound-system, either by HDMI, or WiFi. (maybe Miracast).
The UI can be from a smartphone or dedicated wireless 'remote'. That way, the USER is in control and has flexibility to freely to watch or listen to material on screen(s) & loadspeakers in ANY room, without having to move the streamer box. Non of that frustrating 'can't watch here', or problems of not all of the media is connected.
will2 - Friday, February 15, 2013 - linkI meant to add, my idea of a Smart TV, it is just another service in a 'home network' that can select/view content from the internet (be it ADSL or 3/4G), that can also monitor a home security video/alarms, i.e the 'internet of things' that Intel, MS & Google mention about once a year.
That way, as you move from room to room, much as you switch on a light, you can interact with the 'Smart TV' and where any intruder detection can overide the screen content with video of the intruder.
sotoa - Friday, February 15, 2013 - linkI like using Hulu since they have the shows that I miss when they go live. The quality and audio is ok. Just don't like how I have to wait 1 WEEK after the show went live to see it. I need Hulu plus for that, but I understand the business aspect (fine). But boost the audio and video quality too please! Want 5.1 audio?... I'd pay extra.
Here's a problem I see with online ads (Hulu for example). I answer their questions about "Does this ad pertain to you?" and they are NOT tailoring the ads to me. I'm subjected to tampon and girly ads, but I'm a guy! You'd think that after using Hulu for years, that they would "know" me. Hence their ads fall on my deaf ears. I do give them credit for finally making the ads more high def rather than the horrible visuals we used to be.
Basically, these companies delivering entertainment need to figure out how to sell their ads and therefore will be more profitable. Then they need to be able to give us tiers of quality (visual & audio), plenty of choices of content, and be able to watch it from any device.
I hope Intel's device (box) would be far far superior than these dinky boxes that cable companies give (Cablevision, Timewarner, Comcast, etc). These boxes burn so much electricity, are slow, and break a lot.
andrewaggb - Friday, February 15, 2013 - linkI'm really only interested in specific content. Not 'channels', bundles, and other garbage that is forced on us.
I would like to be able to pick specific current tv shows and sports teams that I'm interested in and be able to watch them as close to live (sports) or as soon as available (tv shows).
PVR's are useless if you can just watch what you want when you want it.
But I'm in Canada so I don't expect anything to come of this because we're totally screwed by our providers and our market is a secondary market at best.... sigh.
Exelius - Friday, February 15, 2013 - linkThere is absolutely, positively no way that something like this will ever happen.
The problem is simply distribution. Current cable/satellite video programming is distributed via what is essentially a hybrid unicast/multicast system that multicasts the most popular networks and unicasts the less popular ones. The cable companies don't do this because they hate you and want to force you to watch what they want you to watch. I mean, not that they don't want that, but that's not why multicast video exists.
Multicast video exists because of the last mile problem: cable is effectively one huge shared pipe for everyone in your neighborhood. So they take most of that pipe and allocate it to cable TV, which your cable box then decrypts based on what channels you've paid for. Then they take that huge pipe and allocate the rest of it for internet traffic: that's right, everything you do on the internet is broadcast to everyone in your neighborhood (albeit encrypted.)
Multicast streams drive down the effective bandwidth usage per user while watching video. If 1,000 people in an area are watching an uncompressed HD stream at 10 Mbps, their effective usage per viewer is 10kbps for an HD stream. Take those same 1000 people and switch even 10% of them to watching a 1Mbps compressed HD stream, and suddenly your effective usage per user jumps to 110kbps per user. A 10% shift in viewing patterns resulted in a 1000% jump in bandwidth usage per user for *the exact same activity*. You can do some things with multiplexing and line filters to alleviate this; but the problem doesn't really go away.
This is why we, in the US, will not have this type of a-la-carte cable service in the near future. Companies are working to replace last-mile broadcast networks like cable with fiber optics, but it's expensive and will take at least a decade (probably two or three) to complete. Because cable is a last-mile broadcast network, it almost requires a multicast solution to video consumption.
This is MUCH more of a structural problem than the media gives it credit: I would love to see a reputable tech site really dig in to how utterly incompatible the vision we all have of how video should work is with the technical reality of the broadband industry in the US today.
More on the topic of this article, I really just don't get what Intel is doing here. They are a company who has traditionally sold technology products through channel sales to OEM technology manufacturers. Now they're trying to be a middleman between consumers and media companies? What does Intel think they have that everyone else doesn't? Why would they be more successful here than Apple or Microsoft? The key barrier in this market is not technology, it's content rights and consumer marketing. Neither of those are things Intel has any experience with. I get diversification, but I think they're too late to the game for that.
Death666Angel - Friday, February 15, 2013 - linkI don't quite think the smartphone analogy works. Whereas the state of smartphones was similar all over the world, I feel like TV is a very different beast on other countries. I know for example that German Pay TV is really struggling. People just don't want to pay for TV here. I personally use TV for a few news shows. But I got my actual content by buying the DVDs/BDs of shows and movies I like. I'm not behind my friends either, because they wait for the localization of the stuff while I watch it in the original. I spend a good deal on that, but it's different than something like a cable subscription you describe. I own these BDs/DVDs, I can do all sorts of things with them. With subscriptions, once I cancel, I don't own anything anymore. I love re watching older stuff. Or catching up on the old season before the new one comes out. I don't think I'd be in the market for anything Intel can offer. And I don't see many of my friends there either.